Why fish in a bucket if you have a pond at your disposal? Is that logical? Throughout the business world, however, it is believed that top positions are nearly only cultivated internally. A romantic halo floats around home-grown talent development and it inspires confidence.
But it isn’t logical. Nor smart.
Let’s take a company of about twenty thousand employees. If you ask management what percentage would potentially be suitable for top positions, the answer is usually around five per cent. A thousand employees. Now, let’s take the entire industry. How many people would then be potentially suitable for a leadership position? It is a multiple of that thousand. It could easily be ten thousand candidates or more.
My statement is that one has to rely on the external market for succession positions if a company wants to find the best people, the very best the industry has to offer at a specific moment. You are more likely to find what you are really looking for if you also allow yourself to keep an eye out for talent outside of your own company. It seems so obvious, but I notice that many companies confine themselves to internal succession strategies in their daily practice.
I like to make a comparison with major sports teams. Soccer clubs such as Ajax, Bayern München, Barcelona and Manchester City invest hugely in talent development. But what percentage of the players who end up playing on the first team are home-grown? Coming from their internal super professional youth academies? Not more than ten per cent, even at those clubs that continuously focus on succession and look ahead when it comes to filling the positions on their first teams. They rely on talent scouting, on external, intensive search, for eighty, maybe even ninety per cent. Also in highly-qualified top-level sports, cultivating internally is only relatively significant.
If you want to be the best, you should always run a very active scouting strategy. Am I promoting my own business? Absolutely. We are here to give shape to that scouting strategy in an honest and professional way. That’s what makes our profession so fascinating. I notice that we make a decisive contribution to a successful succession strategy. Mainly because we are permanently scouting the external market and we are so familiar with many different industries.
Executive scouting goes beyond the regular executive search. Searching means the following: I lost an important link in my organization, that position needs to be filled fast, search someone. Okay, fine, we will. Scouting means: we are not going to look for a replacement of Messi when Messi is gone. No, we’ve been working on his replacement for a long time.
The CEO of company X or Y has beautifully completed his mission critical positions. That’s the extent of his strategy, but it stops there. Suddenly, someone leaves. Then, uncertainty strikes: who am I going to find to replace this person?
Ideally, I think that a CEO has a clear vision of the top positions in his team and always keeps a circle of talents in the pipeline. A potential that he has clearly visible, that he can rely on and call on when needed.
Every day, we, as scouts, are out there in the market. That’s what gives us a wide field of vision. We are always open to interesting people. We position ourselves between the lines. On one side, as experts of the external labour market, on the other side, as consultants for the client. The aim is to work together, to discuss strategies and people who are soon going to implement those strategies. This is how company management creates time and consistency for itself. The selection is narrowed down and sharpened and the best possible outcome is achieved.